Debenhams says its investment in improving its multichannel service through a mobile-first strategy has helped it to grow online sales by 9.3% in its latest financial year. The retailer has brought the management of store and online operations together under retail director Ross Clemmow, as it looks to deliver a seamless shopping experience to customers.
The department store group, a Leading retailer in IRUK Top500 research, says online has become more profitable as more customers use it and opt for premium delivery options. Ecommerce earnings before interest, tax and asset depreciation are 14% ahead of last time.
The update came as Debenhams reported group revenue of £2.3bn in the year to September 3. That’s 0.5% down on the same time last year. UK sales of £1.9bn were down by 0.8%, and international sales of £409.8m were up by 0.9%. Top-line pre-tax profits of £118.2m were 0.5% ahead of last year, but after exceptional costs of £12.4m related largely to restructuring costs, bottom-line pre-tax profits came in at £105.8m, 10.4% down on last time.
Debenhams chairman Sir Ian Cheshire said profits were in line with market expectations and reflected a strong performance over peak followed by a tougher second half trading environment.
“Our diversified business model together with good cash generation and reducing debt means that Debenhams is in good shape to withstand a market background that remains uncertain,” he said. “Our executive team, supported by all our colleagues, are actively managing the business to increase its resilience and flexibility, which will stand us in good stead to deliver long term sustainable growth.”
He said that there would be an update next spring on longer-term plans for the next phase of Debenhams’ development, following the arrival of new chief executive Sergio Bucher this month.
Mobile accounted for more than 50% of online orders during the year. More than half the traffic to the Debenhams website came via smartphones, while Debenhams says a simpler checkout process coupled with improved brand communication has helped drive smartphone conversion rates up by a fifth (22%).
Click and collect was used for 32% of online orders last year, peaking at 46% in the week before Christmas.
The retailer also identified customer ‘pain points’ that it plans to tackle in the year ahead. These include simplifying returns and refunds, and speeding up till service through contactless tills and mobile payments. ‘Queue Buster’ mobile payment points operate in particularly business departments at peak shopping times.
